By Our Reporter
SHILLONG, Dec 2: A day after the Congress had warned the Meghalaya government against heading towards a debt trap due to its policy of taking massive loans, Chief Minister Conrad K. Sangma on Tuesday said 72 per cent of the loans would be repaid by the Centre while the state government would have to pay the remaining 28 per cent upfront.
Reacting to the Congress’s statement that Meghalaya’s loans amount to 40 per cent of GSDP, Sangma said Government of India, Ministry of Finance and Reserve Bank of India have their own mechanisms to ensure that no state takes loan beyond a certain level.
“We are very much within that level,” he said, claiming that almost 70 per cent of the funds used for the growth of Meghalaya is coming from the internal revenue of the state.
The Chief Minister further stated that ADB and World Bank loans are in the ratio of 80:20. Meghalaya is supposed to pay 20 per cent of the loan upfront, he added.
“Out of the 80 per cent loan component, 90 per cent is a grant by the Centre and the Meghalaya government has to repay only 10 per cent. If you look at the entire calculation, 72 per cent is paid by the central government and 28 per cent has to be paid by the state government as advance upfront,” Sangma said.
Accusing state Congress president Vincent H. Pala of trying to mislead people, he said the Congress, unable to counter the growth of the state, resorted to misleading people.
Pala had warned that Meghalaya is heading towards a debt trap, alleging that the state government has accumulated massive loans amounting to nearly 40 percent of the State’s GSDP.
He claimed the national average of debt-to-GSDP stands at around 28 percent, whereas Meghalaya is “crossing all limits” in its borrowing.
“How can we survive if we continue taking loans like this?” Pala said, noting that the state’s internal revenue collection is around Rs 4,000 crore and tax contribution stands at around Rs 9,000 crore.
“For the rest, we are dependent on the mercy of the central government,” he added, pointing out that the State Government is currently borrowing from external agencies at a rate of Rs 85–Rs 86 per dollar, which could rise to Rs 100 per dollar in the future.
Stating that Meghalaya cannot afford such extensive borrowing when there are “massive leakages” in revenue and royalty collection, Pala said the per capita debt in the state has now reached a staggering Rs 76,000 per citizen.
He further alleged that despite taking huge loans, the benefits are not reaching the public, as much of the borrowing is directed towards roads and infrastructure projects, where “many contractors are ministers or people close to the government.”
